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Chapter 3: Q. a - For Critical Thinking (page 51)

Is there an inverse relationship between the price of cable TV and the number of subscriptions that people purchase?subscriptions Explain

Short Answer

Expert verified

Yes.

Step by step solution

01

Step1. Introduction

Law of Demand states that there exists an inverse relationship between quantity demanded and price of the good, i.e. as the prices increase, quantity demanded falls and vice versa.

02

Step2. Explanation

As the price of subscription increase, it becomes costly for the people to purchase the subscription, and hence they will demand less. At the same time, when prices fall, subscriptions increases.

Hence, we can say, there exists an inverse, negative, relationship between the two.

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